Region | Palestinian Territories

US objections may hinder aid

Plans by Middle East mediators to avert a Palestinian financial collapse will likely take weeks to finalise and fall far short of what is needed to overcome an economic crisis.

  • Reuters
  • Published: 23:33 May 3, 2009
  • Gulf News

Occupied Jerusalem: Plans by Middle East mediators to avert a Palestinian financial collapse will likely take weeks to finalise and fall far short of what is needed to overcome an economic crisis.

Western diplomats said US objections to including salary payments as part of the new aid programme could make it impossible to reverse a steep drop in living standards even if supplies of food and medicine increase sharply.

The Quartet of the United States, European Union, Russia and United Nations raised Palestinian hopes last week with a promise to funnel aid to Gaza and the West Bank, while bypassing the Hamas-led government.

"There are major obstacles," said one of the diplomats working on the mechanism. He added that he did not expect the new Quartet programme to be up and running before the end of June. A US official said the Quartet members would meet in Brussels in two weeks' time to discuss progress.

An internal EU memo said that with "even substantially increased levels of funding, the EU will not be able to stave off a crisis but might be able to avert or delay a collapse."

As currently envisaged, a European-backed plan to set up a trust fund for aid would, at most, pay salaries to health and education workers, only a quarter of the Palestinian National Authority's 165,000 workforce.

But diplomats said opposition from Washington and the reluctance of banks to breach a US-led financial blockade could prevent the payment of any salaries.

"God willing, our money will come next week," said Raed Fatath, a 48-year-old school teacher in the West Bank.But a senior European diplomat said people had the "wrong perception". Under the proposed mechanism being crafted by the EU, a trust fund would direct aid to key sectors through the office of Palestinian President Mahmoud Abbas.

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